Market Wrap For April 22: S&P Rises for Sixth Straight Day, Dow and Nasdaq Also Positive

U.S. stocks rose as investors cheered recent earning reports and a positive home sales data for March. A $45 billion M&A offer also contributed to Tuesday's buying action as investors could be excited and motivated to buy stocks ahead of a few rough weeks of bearish activity. The S&P 500 rose for the sixth straight day, it's longest wining streak of 2014. The last time the index banked six straight positive days was back in September. The Dow was unable to hold on to a triple digit point gain but nevertheless ended the day in positive territory. The Nasdaq index outperformed both the S&P 500 and the Dow as momentum has returned to many high profiled names in the index. The Dow gained 0.40 percent, closing at 16,514.37. The S&P 500 gained 0.41 percent, closing at 1,879.55. The Nasdaq gained 0.97 percent, closing at 4,161.46. Gold lost 0.23 percent, trading at $1,285.60 an ounce. Oil lost 1.86 percent, trading at $101.72 a barrel. Silver gained 0.46 percent, trading at $19.47 an ounce.
News of NoteICSC Retail Store Sales
rose 0.4 percent week over week, compared to a decline of 0.3 percent last week.
Redbook Chain Store Sales
rose 3.7 percent year over year compared to a 2.6 percent gain last week.
April's Richmond Fed Manufacturing Survey
rose to +7 from -7 in March and ahead of the forecast of 0.
March Existing Home Sales
declined to 4.59 million from 4.60 million in February but topped the consensus estimate of 4.55 million. Japan's $1.26 trillion Government Pension Fund will undergo changes in investment strategies to improve returns by making higher risk investments as part of Prime Minister Shinzo Abe's strategy to reform the economy.
Analyst Upgrades and Downgrades of Note
Analysts at
Citigroup
maintained a Buy rating on
AthenahealthATHN
with a price target lowered to $200 from a previous $225. Shares lost 1.08 percent, closing at $134.12. Analysts at
Citigroup
maintained a Buy rating on
Du PontDD
with a price target lowered to $76 from a previous $78. Shares gained 0.49 percent, closing at $67.36. Analysts at
Deutsche Bank
maintained a Hold rating on
Encana CorporationECA
with a price target raised to $26 from a previous $25. Shares lost 0.22 percent, closing at $23.12. Analysts at Jefferies maintained a Hold rating on
Gilead SciencesGILD
with a price target lowered to $82 from a previous $85. Shares gained 1.76 percent, closing at $72.86. Analysts at BMO Capital upgraded
Home DepotHD
to Outperform from Market Perform with a $90 price target. Shares gained 2.17 percent, closing at $79.65. Analysts at Jefferies maintained a Buy rating on
MicrosoftMSFT
with a price target lowered to $46 from a previous $47. Shares gained 0.13 percent, closing at $39.99. Analysts at Jefferies maintained an Underweight rating on
NetflixNFLX
with a price target raised to $300 from a previous $250. Meanwhile, analysts at both FBR Capital and BMO Capital maintained Market Perform ratings with price targets of $393 (from a previous $356) and $400 (from a previous $370), respectively. Analysts at Cantor Fitzgerald upgraded Netflix to Buy from Hold with a $425 price target and analysts at Needham reiterated a Buy rating and $525 price target. Shares surged 7.00 percent, closing at $372.90.
Recommended: Netflix And Comcast In War Of Words Analysts at Barclays maintained an Equal-weight rating on Owens Corning OC with a price target raised to $47 from a previous $45. Shares gained 2.38 percent, closing at $43.87. Analysts at Jefferies maintained a Buy rating on Schlumberger SLB with a price target raised to $119 from a previous $114. Shares hit new 52-week highs of $102.66 before closing the day at $102.02, up 0.22 percent. Analysts at Deutsche Bank maintained a Hold rating on Sarepta Therapeutics SRPT with a price target raised to $35 from a previous $17. Shares surged 14.16 percent, closing at $38.79. Analysts at Citigroup maintained a Neutral rating on UnitedHealth Group UNH with a price target lowered to $77 from a previous $79. Meanwhile, analysts at BMO Capital maintained an Outperform rating on UnitedHealth with an $85 price target. Shares gained 1.07 percent, closing at $75.75. Analysts at Citigroup maintained a Neutral rating on Walter Energy WLT with a price target lowered to $9 from a previous $12.50. Shares gained 1.24 percent, closing at $7.33. Equities-Specific News of Note Novartis NVS and GlaxoSmithKline GSK have entered in an arrangement to exchange certain assets. Novartis will buy GlaxoSmithKline's oncology products for $14.5 billion and up to $1.5 billion in milestones. In exchange, GlaxoSmithKline will sell its vaccines businesses to Novartis for $5.25 billion and up to $1.8 billion in milestones and royalties. Novartis will combine its over the counter operations with GlaxoSmithKline's Consumer Healthcare unit in which Novartis will maintain a 36.5 percent ownership stake. Shares of GlaxoSmithKline gained 4.13 percent, closing at $55.31 while shares of Novartis hit new 52-week highs of $86.78 before closing the day at $86.53, up 1.25 percent. Alan Horn, a Disney DIS chairman confirmed that filming of the upcoming Star Wars Episode VII has already began. Shares gained 0.44 percent, closing at $79.46. Recommended: Supreme Court Ruling Could Change The Face Of Television Forever According to a study by Ohio State University, households located in states with an applicable sales tax on online purchases have cut their spending on Amazon.com AMZN by ten percent. Shares lost 0.47 percent, closing at $329.32. Total TOT announced that recent tensions involving Russia dn Ukraine are not likely to have a direct impact on the company's operations in the region. Shares gained 0.60 percent, closing at $68.64. Medtronic MDT could continue selling its CoreValue System until the U.S. Court of Appeals for the Federal Circuit makes a final decision in a patent dispute with Edwards Lifesciences. Shares of Medtronic lost 1.09 percent, closing at $58.30 while shares of Edwards Lifesciences gained 0.78 percent, closing at $79.74. Winners of Note According to an Allergan AGN statement released late Monday night the company has not had any contact with Bill Ackman's Pershing Square over any M&A activity with Valeant Pharmaceuticals VRX as reported by several media sources , but the company will remain open to possibilities. Bill Ackman's fund owns a 9.7 percent stake in Valeant. As today's trading day progressed, Valeant officially proposed a cash and stock deal valuing Allergan at $152.88. Valeant has offered to pay $48.30 in cash and 0.83 shares of its common stock as the company believes it can achieve $2.7 billion in annual savings with a newly created entity. Shares of Allergan surged to new 52-week highs of $165.45 before closing the day at $163.5, up 15.25 percent. Shares of Valeant surged higher by 6.87 percent, closing at $134.67. This morning, Centene Corporation CNC reported its first quarter results. The company announced an EPS of $0.57, beating the consensus estimate of $0.45. Revenue of $3.35 billion beat the consensus estimate of $3.25 billion. Earnings from operations in the quarter rose to $70.0 million from $39.6 million in the same quarter last year as the company's at-risk managed care membership of 2.885 billion rose 13 percent year over year. Centene issued guidance and sees its full year revenue to be in a range of $14.2 billion to $14.8 billion, in line with the consensus estimate. The company expects its EPS to be in a range of $3.60 to $3.90, at the low end of the consensus estimate of $3.62. Shares gained 12.22 percent, closing at $64.29. Recommended: Gold Or The DJIA: Which Would You Rather? Manchester United MANU has fired its general manager David Moyes following a ten month tenure which included a very disappointing season as the team will not qualify to play in the Champions League next season. Shares gained 5.98 percent, closing at $18.78. Canadian Solar CSIQ announced it has entered in an agreement to supply 43MW of modules for Japan's second largest solar plant project. Delivery is expected to begin in May and extend until early 2015. Shares gained 9.45 percent, closing at $29.64. Tesla's TSLA CEO Elon Musk confirmed earlier reports that the company will begin producing cars in China within four years. Shares gained 6.98 percent, closing at $218.64. Decliners of Note This morning, Medidata Solutions MDSO reported its first quarter results. The company announced an EPS of $0.11, missing the consensus estimate of $0.16. Revenue of $76.6 million missed the consensus estimate of $79.5 million. Net loss for the quarter fell to $1.8 million from a net profit of $5.7 million in the same quarter last year as the company's operating margin fell 620 basis points from a year ago. Investors are taking the results to reinforce previous concerns of slowing growth and that the company's competitive advantage is being eroded. Shares plunged 22.74 percent, closing at $40.71. BEBE BEBE issued a warning for its third quarter results and the company expects to lose $0.29 to $0.32 per share, worse than the consensus estimate calling for a loss of $0.15 per share. The company added that comparable store sales have fallen 5.7 percent during the quarter and will total around $93 million, compared to $113 million in the same quarter a year ago. Shares lost 9.94 percent, closing at $5.80. Earnings of Note This morning, Teck Resources TCK reported its first quarter results. The company announced an EPS of $0.18, missing the consensus estimate of $0.24. Revenue of $2.08 billion missed the consensus estimate of $2.10 billion. The company's profit for the quarter fell to $105 million from $328 million in the same quarter last year as the company operated in a weak commodities market, particularly coal. The company announced initiatives to reduce costs and will lay off around five percent of its workforce, or 600 workers. The company plans to slash $200 million in costs and reduce capital spending by $150 million. Finally, the company will defer the restart of its coal project in British Columbia given lower coal prices. Instead, the company will restart a zinc mine in Washington State as zinc prices have a higher outlook. Shares gained 2.29 percent, closing at $22.29. This morning, United Technologies UTX reported its first quarter results. The company announced an EPS of $1.23, missing the consensus estimate of $1.27. Revenue of $14.75 billion was in-line with the consensus estimate. Net income for the quarter fell to $1.21 billion from $1.27 billion in the same quarter last year as the company took a restructuring cost of $0.09 per share. The company saw sales gains in its Otis, Climate, Control & Security, Aerospace Systems and Sikorsky divisions while sales at Pratt & Whitney declined year over year. The company increased its 2014 EPS estimates to a range of $6.65 to $6.85 (from a previous $6.55 to $6.85) versus a consensus estimate of $6.83. Shares hit new 52-week highs of $120.66 before closing the day at $119.19, up 0.75 percent. This morning, The Travelers Companies TRV reported its first quarter results. The company announced an EPS of $2.95, beating the consensus estimate of $2.15. Revenue of $5.87 billion missed the consensus estimate of $5.91 billion. In the quarter, Travelers' operating income rose to $1.052 billion from $887 million in the same quarter last year which resulted in an operating return on equity of 17.8 percent, the company's highest quarterly level since 2009. Net investment income increased seven percent, benefiting from strong returns in the company's non-fixed income portfolio. Travelers announced it had returned $882 million in capital to shareholders which included $705 million in share repurchases. The company also announced it will increase its quarterly dividend by ten percent to $0.55, marking the tenth consecutive year of doing so. Shares gained 0.57 percent, closing at $86.89. Recommended: General Electric's Jeffrey Immelt...The Real Raymond Tusk? This morning, Comcast CMCSA reported its first quarter results. The company announced an EPS of $0.68, beating the consensus estimate of $0.71. Revenue of $17.4 billion beat the consensus estimate of $17.0 billion. Net income for the quarter rose to $1.87 billion from $1.44 billion in the same quarter last year partly due to the Sochi Olympics which generated over $1.1 billion in revenue. Cable Communications Customer Relationships rose by 124,000 subscribers, Video Customers rose by 24,000 subscribers and High-Speed Internet customers rose by 383,000. During the quarter, the company's quarterly dividends and share repurchases increased 35.5 percent to $1.3 billion. Shares gained 1.90 percent, closing at $50.83. This morning, McDonald's MCD reported its first quarter results. The company announced an EPS of $1.21, missing the consensus estimate of $1.24. Revenue of $6.7 billion missed the consensus estimate of $6.73 billion. Net income for the quarter fell to $1.204 billion from $1.27 billion in the same quarter last year as comparable store sales rose 0.5 percent outside of the U.S. but fell 1.7 percent in the U.S. The company blamed weather for its poor U.S. sales figure. Shares lost 0.35 percent, closing at $99.32. After the market closed, AT&T T reported its first quarter results. The company announced an EPS of $0.71, beating the consensus estimate of $0.70. Revenue of $32.47 billion was in-line with the consensus estimate. Shares were trading lower by 1.57 percent at $35.72 following the earnings release. After the market closed, Gilead Sciences GILD reported its first quarter results. The company announced an EPS of $1.48, beating the consensus estimate of $0.90. Revenue of $5.0 billion beat the consensus estimate of $3.8 billion. Shares were trading higher by 3.99 percent at $75.77 following the earnings release. Quote of the Day "The Internet is in constant evolution in terms of the relationships and interconnection that we see. So we did end up choosing to pay Comcast to improve the video quality that our members experience. We don't think we should have to, but in the short-term we felt like we had no choice. So we have got that deal in place. In addition, more lobbying for this idea that we think is very natural, which is interconnect as part of net neutrality, it's a stronger form of net neutrality and now we are in opposition to the Comcast, Time Warner merger because we are really concerned about what happens when the combined entity, if the merger were to go through, would have with over 60% of U.S. homes passed and eventually over 50% of U.S. homes subscribing to cable Internet and that's a worrisome factor. So we think it's more in the public interest to either not have them merge or if the government goes ahead with it, to at least put some significant merger agreements, settlements in there." - Netflix CEO Reed Hastings during Monday's first quarter conference call.
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